With most Budgets everyone in the UK is in a state of panic to second-guess the Chancellor’s intentions, aren’t they? The worry for most of us consumers in the population was that he (there have been no she’s) would tax or increase tax on something important to us – should we rush to the off-licence and buy a case of wine or drive to the garage and fill up with fuel, or head down to the electrical shop to avoid a VAT rise and buy a TV of washing machine?
Not this time though, eh? George Osborne is only seven weeks away from a General Election that the Conservative Party is in serious danger of losing after only five years in power. He can’t afford to rock the boat and introduce ‘yet’ the swinging taxes needed can he – despite the fact that he has failed to clear the deficit as committed (achieved less than half), and moreover doubled the national debt? He has publically claimed on television last Sunday that there would be ‘no give-aways’ and ‘no gimmicks’ (watch my lips? no ifs or buts? eh?) – dream on everybody they will be there, but just be a bit more disguised, don’t you think? Is it really going to be as much as six billion pounds?
A previous post here [George Osborne’s Budget March 2015 – his last or not?] tried to outline his possible constraints, but what might he actually DO perhaps? [Strangely there have been no ‘significant’ budget leaks (yet) from the Conservatives/LibDems this time – ah, but they have been warned that the Police will be called in this time if it happens!].
The first thing he might do is throw a crust to the LibDems to get them onside and paralysed. So you can expect him to announce say another highering of the income tax threshold to benefit low earners – that will keep his LibDem co-conspirators quiet, ensure their support for the full budget, and give them something to boast about on the hustlings, wont it?
He will also want to appease the working class Tory voter living on a downtrodden Council estate (who pretend they are middle class by putting Conservative posters in their grubby little windows) by reducing the price of a pint of beer (a bit pointless really because the breweries will simply put it back up again as soon as they can won’t they?). But this is a good disguised ploy though, because in the same flourish, he can reduce as well the duty on other booze like wines & spirits, so please millions of potential voters – not least the upper class drinkers of his favourite Bollinger champagne (introduced to him and David Cameron at the Oxford University wild Bullingdon Club, eh?
The Tories somehow have ‘already’ announced that the minimum wage is to go up by 20p (but to nowhere near to the level of the ‘living wage’ of course, nor even to the £7 promised by Osborne over a year ago – announced though as a spoiler for Ed Miliband’s attack on Tory historic opposition to the minimum wage?). It will get the headlines doubtlessly but it is meaningless, isn’t it? Due to market forces the minimum wage has now become the ‘maximum’ wage at the bottom end of the market – because of uncontrolled immigration of unskilled workers. He can of course though add another ten pence tax to cigarettes – that will upset no one except exceptionally silly consumers and the dozens of Tory MPs taking favours from the tobacco companies, don’t you think?
Is he likely to announce new increased funding for the NHS to scupper Labour’s expected bandwagon attack on health care failures next month as the election proper gets underway? This will though be done in some clever way, with some unexpected excuse, or funding source that will avoid immediate damning criticism. Perhaps an injection of funds into children’s mental health services, subject to a damning report today? Or perhaps greater funding for GP surgeries say for attached pharmacies? Or injection of much needed funds into social care to take the strain off hospital beds?
The Energy firms needed worry though, he won’t be announcing a windfall tax on them – they have been good friends, supporters and funders of the Tories, haven’t they? The North sea oil companies are anticipating a tax reduction (to match what Osborne had increase previously), because the current drop to half of the oil price is devastating the UK industry and investment?
He will then understandable also try to entice the floating voters into the Conservative camp, won’t he? What he will do depends of what their focus groups have come up with though. Possibly extra help to the housing sector – because everyone is currently fixated by housing, aren’t they? We all want the value of our house to go up, or get a better house, or get on the housing ladder, or want our children to get a house, or even to build extensions, or refurbish, or refurnish, or redecorate. Perhaps a reduction of VAT on DIY products (that will please his Mum & Dad and help their apparently (?) semi failing upmarket furnishing, wallpaper & fabric family company)? If there is not a substantial giveaway in this sector you can be rightly amazed – it will be disguised as supporting the deserving hard working people of the UK struggling to improve their living conditions. There must be something in there for Pensioners that have money – pensioners vote don’t they (nothing better to do?).
Traditional Conservative voters will be well self satisfied by his planned reduction of inheritance tax – it might affect only one in twenty people but inheritance keeps the rich and their offspring at the top of the pile, doesn’t it? The high earners can expect further recognition by further tax changes so they can hoard more of their money, eh? The well-off will also be promised tax reductions in the next parliament, with specific proposals in the Budget, no doubt?
He has also to secure his reputation as a hatchet man Chancellor so he must demonstrate his continuing commitment to austerity and the Party’s ideological desire to cut central government running costs. He will possibly identify three departments that will suffer major cuts – starting with the Home Office to undermine Home Secretary Theresa May, his likely opponent as the next leader of the Party, don’t you suppose? Perhaps the Police will get another hit as a result, because law & order is no longer on the public’s radar, the Conservatives think?
[We can be certain of one thing though can’t we? This is going to be the most ‘insignificant’ Budget ever, wouldn’t you say?].